Description

You can bring the horse to water but you cannot make it drink.

Issuer: Anglo Irish Bank

Security: Angiri Floater of November 2nd 2011

ISIN: XS0273602622

Outstanding: US$ 1 bn

Currency: USD

Everyone knows that Ireland is bankrupt, soon to be bankrupt, about to file bankruptcy, etc etc etc. So the trade here is to bet that they don't go bankrupt until November 2nd 2011. Thats right. The bet is that Ireland will not file for the next six months. If ireland does not file for 6 months the holder of the Angiri floaters of 11 makes 14 pts to the midpoint which equates to 17 pct, which annuallized equates to 34 pct. Bloomberg says the yield is 44 pct. I don't really subscribe to yield calculations on short term paper, but there it is if you want it.

This bond is Sr. Unsecured debt of Anglo Irish Bank, now owned by the government of Ireland, so the credits from my point of view are equivalent, w/ the potential extra kicker at Angiri, that maybe there is some value in the loan portfolio that the bank has made. By the looks of the bailout to the banks, it is pretty unlikely.

While there has been speculation that Ireland may eventually ask for Sr. Bondholder participation in any eventual future bailout, this is purely theoretical at this time. As seen by today's news coming out of Germany, http://online.wsj.com/article/SB10001424052702304563104576355514024153114.html?mod=WSJ_hp_LEFTWhatsNewsCollection&_nocache=1306808129735&mg=com-wsj , it is likely to be a long time before anyone in Europe or its periphery actually defaults. The reason, whether we like it or not, is relatively simple. Greece files, Ireland files, Ireland Files, Portugal Files, Portugal Files and there goes Spain and so on up the ladder until you get to a nice France default which we all know will not happen because by then the Common currency wont even be able to be used for toillette paper and the Greek riots will have spread to the Champs Elysees which translates into full blown European quantitative easing in order to save the banking system and while this may not preserve wealth in gold, it will preserve the corporate institutions to some degree and that is how the world actually runs in a novel not written by Ayn Rand.

Now for the value part of the idea. Buy 5 yr Ireland Sr. protection at 680 over which for 3 months will cost you one half of the 680 so 340 and that way, you can sleep at night and are 90 pct hedged in the sense that there are few scenarios where the bank does not pay and ireland does. Obviously you have a duration mismatch, but it is hard to conceive of a scenario where this duration mismatch really hurts your return.

Catalyst

Maturity. NOVEMBER 2nd 2011

Additionally, the Co. payed the coupon the other day.

sort by

Description

You can bring the horse to water but you cannot make it drink.

Issuer: Anglo Irish Bank

Security: Angiri Floater of November 2nd 2011

ISIN: XS0273602622

Outstanding: US$ 1 bn

Currency: USD

Everyone knows that Ireland is bankrupt, soon to be bankrupt, about to file bankruptcy, etc etc etc. So the trade here is to bet that they don't go bankrupt until November 2nd 2011. Thats right. The bet is that Ireland will not file for the next six months. If ireland does not file for 6 months the holder of the Angiri floaters of 11 makes 14 pts to the midpoint which equates to 17 pct, which annuallized equates to 34 pct. Bloomberg says the yield is 44 pct. I don't really subscribe to yield calculations on short term paper, but there it is if you want it.

This bond is Sr. Unsecured debt of Anglo Irish Bank, now owned by the government of Ireland, so the credits from my point of view are equivalent, w/ the potential extra kicker at Angiri, that maybe there is some value in the loan portfolio that the bank has made. By the looks of the bailout to the banks, it is pretty unlikely.

While there has been speculation that Ireland may eventually ask for Sr. Bondholder participation in any eventual future bailout, this is purely theoretical at this time. As seen by today's news coming out of Germany, http://online.wsj.com/article/SB10001424052702304563104576355514024153114.html?mod=WSJ_hp_LEFTWhatsNewsCollection&_nocache=1306808129735&mg=com-wsj , it is likely to be a long time before anyone in Europe or its periphery actually defaults. The reason, whether we like it or not, is relatively simple. Greece files, Ireland files, Ireland Files, Portugal Files, Portugal Files and there goes Spain and so on up the ladder until you get to a nice France default which we all know will not happen because by then the Common currency wont even be able to be used for toillette paper and the Greek riots will have spread to the Champs Elysees which translates into full blown European quantitative easing in order to save the banking system and while this may not preserve wealth in gold, it will preserve the corporate institutions to some degree and that is how the world actually runs in a novel not written by Ayn Rand.

Now for the value part of the idea. Buy 5 yr Ireland Sr. protection at 680 over which for 3 months will cost you one half of the 680 so 340 and that way, you can sleep at night and are 90 pct hedged in the sense that there are few scenarios where the bank does not pay and ireland does. Obviously you have a duration mismatch, but it is hard to conceive of a scenario where this duration mismatch really hurts your return.

Catalyst

Maturity. NOVEMBER 2nd 2011

Additionally, the Co. payed the coupon the other day.

Messages

Subject

Greece Bailout 2.0 is in the works.

Entry

06/06/2011 12:06 PM

Member

torico780

Subject

Looks like I am wrong

Entry

06/15/2011 12:17 PM

Member

torico780

Irish finance minister asking for haircut at Angiri.

We'll see what happens.

Subject

Deputy prime minister now says that

Entry

06/21/2011 02:39 PM

Member

torico780

Ireland must honor its deal w/ banks.

No one said it was going to be smooth.

You can now buy the bonds for 79....

Anyone, anyone?

Subject

Less than 70 days to go to maturity.

Entry

08/31/2011 11:20 AM

Member

torico780

Subject

Bonds at 91 pretty sure everyone was too afraid to

Entry

09/07/2011 09:34 AM

Member

torico780

buy them.

Subject

Bonds are going to par. Thanks for playing

Entry

09/18/2011 12:57 AM

Member

torico780

UMMMMMM yeah..... PAR dum di dum dum duh....

Finance Minister Michael Noonan said the Irish government may reconsider its push for senior bondholders of Anglo Irish Bank Corp. to absorb losses.

Noonan said Ireland now was likely to pursue other angles rather than continue to press for bondholder losses, noting that European authorities are "dead set against" a coercive approach. The cost savings might not justify the potential hit to Ireland's standing with markets, he told reporters today after talks with European Central Bank President Jean-Claude Trichet during a meeting of European Union finance ministers in Wroclaw, Poland.

"The amount of money outstanding in unguaranteed senior bonds in Anglo is just over three billion" euros, Noonan said. "If you did some kind of voluntary burden sharing you might gain 100 million" and "one wouldn't risk reputation for that."

Anglo Irish, the recipient of a 29.3 billion-euro ($40 billion) bailout, had its credit rating cut in June by Standard & Poor's to CCC, four levels above default, after Noonan said senior bondholders may face losses. The ECB has consistently opposed this possibility.

Trichet said Ireland should learn from the aftermath of a European push for investors to share in the cost of a second rescue package for Greece, Noonan said.

"Private-sector involvement in Greece had a very quick knock-on effect into Italy and Spain, and private-sector involvement didn't seem to be the way forward if you were trying to encourage the markets," Noonan quoted Trichet as saying.

'Burden Sharing'

"He said Ireland had done particularly well over the summer" and that bond spreads had narrowed, Noonan said. "He felt that anything to do with burden sharing might knock the confidence of the market and the spreads might go back out again and we might lose the ground we had gained."

Irish officials will now reflect on Trichet's advice, echoed by European Union Economic and Monetary Affairs Commissioner Olli Rehn, as they consider how to proceed, Noonan said. Trichet didn't weigh in on a proposal to refinance the bank's promissory notes, he said.

Future payments on Anglo Irish bonds won't be an additional drain on government coffers, Noonan said. The provisions the government already has made include bondholder payments.

"There's no new penalty on the Irish taxpayer," Noonan said. "If we didn't have to pay, there'd be an advantage to the taxpayer down the line, but I think we can get a much bigger advantage if we pursue another piece of negotiations around an alternative piece of financial engineering to the promissory note arrangement."

The possible changes to the promissory notes haven't yet been discussed with credit-rating companies, he said.

Noonan said Ireland may save more money than expected from interest-rate cuts on its government aid packages, based on preliminary EU estimates of its loans from the European Financial Stability Mechanism.

EU officials indicated that "the actual reduction will be 3.75 percent, which is very serious money," Noonan said.

Subject

You can still make 5 pts w/ no risk

Entry

09/19/2011 11:40 AM

Member

torico780

Subject

And for the next 6 points

Entry

10/14/2011 02:06 PM

Member

torico780

Please roll into the Jan 25 2012 Euro Maturity.

Subject

Par on Wed KIDS

Entry

10/26/2011 12:33 PM

Member

torico780

Anglo Irish Bank (10/26/2011) Central Bank loans will be used to repay bondholders

IRISH BANK Resolution Corporation (IBRC), formerly known as Anglo Irish Bank, will repay the $1 billion (€718 million) due to senior unguaranteed bondholders next week using emergency loans from the Central Bank, the proceeds of the sale of its US loans and loans maturing at the bank.The bank no longer holds customer deposits to fund the repayment so will have to rely on further drawings under the Central Bank’s exceptional liquidity assistance (ELA) facility to repay the debt.

IBRC will also source the $1 billion payment from the initial proceeds of the sale of the $10 billion US loan book as they are being received and maturing loans.

Subject

Money for maturity is at Euroclear

Entry

11/02/2011 12:35 PM

Member

torico780

Subject

Money in client accounts

Entry

11/04/2011 02:22 PM

Member

torico780

Subject

Gonna pay the upcoming maturity at PAR

Entry

01/06/2012 03:56 PM

Member

torico780

Ireland strikes again

Subject

2nd Payment on Wednesday

Entry

01/23/2012 12:59 PM

Member

torico780

For those of you still fighting the free money ..... The second maturity of Angiri is coming up in 3 days...

Subject

It it funny how the rating of the idea went up

Entry

01/23/2012 01:01 PM

Member

torico780

as the price of the security went up yet the risk reward by definition went down.... Things that make you go huuuuuummmmmmmm?